Bloomberg News

Partner, Cellcom Drop as Phone Competition Grows: Tel Aviv Mover

April 01, 2012

Cellcom Israel Ltd. (CEL:US) and Partner Communications Ltd. (PTNR) fell, leading declines in Tel Aviv shares, on bets growing competition will compel Israel’s largest mobile- phone providers to keep prices low.

Shares of Netanya, Israel-based Cellcom retreated 2.2 percent to 45.97 shekels, set for the lowest close on record, at 2:18 p.m. in Tel Aviv. Partner’s stock dropped 2.5 percent to 27.90 shekels, poised for the biggest drop since March 19.

Protests since July against rising prices from housing to cottage cheese have spurred Israeli policy makers to zero in on implementing measures to reduce the cost of living. Prime Minister Benjamin Netanyahu’s government is forcing telecom providers to cut fees and encouraging new players in a market where the three biggest companies control 95 percent of sales. Netanyahu announced yesterday that a tax on gasoline will increase by less than planned to ease the burden on consumers.

“They are in a very-competitive market and if they raise prices they will lose market share,” said Ilanit Sherf, an analyst at Psagot Investment House Ltd in Tel Aviv. “The name of the game in the cellular market today is price. Consumers want the cheapest product.” Sherf has a sell recommendation on Partner and Cellcom.

The Hallo 015 mobile-phone service, operated by Hilat-The Israeli Communication Co., began marketing Israel’s first unlimited telephone package last week. Hallo said it would be able to compete in the local market, countering doubts about the feasibility of its operations, Globes reported today, citing a marketing executive at the company.

Cellcom shares slumped 26 percent in the first three months of the year, their biggest quarterly decline on record, according to Bloomberg data going back to the last quarter of 2007. Six analysts recommend selling the stock, while eight have a hold rating and one a buy rating.

Five analysts recommend buying Partner’s shares while six holding it and three selling rating on the stock, which fell 15 percent in the first quarter.

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • CEL
    (Cellcom Israel Ltd)
    • $11.53 USD
    • -0.02
    • -0.17%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus